For these companies, falling solar panel prices means larger profit margins at the end of the day. It seems in the solar panel industry, cause and effect reign supreme. Even when companies on one side of the spectrum are suffering from low profit margins, others are seeing exponential increases.
Competition is driving down prices
Generally speaking, solar panel companies serve the same market. As such, a classic strategy to stay competitive is to lower prices.
Unfortunately, this lowering of prices in the face of competition may be the direct reason why solar panel companies are struggling. First Solar serves as an example, as they were forced to lower their prices to keep themselves viable amongst competition who were doing the same.
After dropping their prices, First Solar experienced a notable drop in their stock which occurred in the second half of 2018. This is a trend that has repeated itself throughout the entire industry, sending stocks plummeting into an ever-spiraling nosedive.
